web analytics
September 2, 2015 / 18 Elul, 5775
At a Glance
Blogs
Sponsored Post


Why It’s Tough to Be an American

Six good reasons why financially, life has become more difficult for American citizens living overseas.
Goldstein 485x300

The American economy isn’t what it once was, and while some Americans are looking to move abroad to better their financial situation, Americans living abroad face specific financial challenges due to the fact that they are American citizens (which I discuss in depth in my new book, The Expatriate’s Guide to Handling Money and Taxes). While holding an American passport once was considered a great advantage, today it has broad ramifications for your finances. Any well-intentioned American parents or grandparents who are thinking of getting American citizenship for their Israeli-born children or grandchildren might want to think again when it comes to taking up this inherited privilege.

Why?

Below are six good reasons why financially, life has become more difficult for American citizens living overseas, regardless of how long they’ve been abroad, whether they’ve ever worked or lived in the States, or even whether they speak English:

(1) FBAR and FATCA. These terms refer to tax reporting requirements that U.S. citizens abroad must file if their assets reach certain minimum levels. Non-compliance can result in steep fines. These requirements have had a very serious effect on how foreign banks and investments view U.S. account holders, since FATCA requires foreign banks to report American accounts and assets to the American government.

The problems that follow are a direct consequence of FBAR and FATCA:

(2) Limits on buying mutual funds through an American brokerage account. You may think it’s O.K. if FATCA makes it difficult to open a foreign investment account, since after all, you can use your American brokerage account and continue with your familiar investments. But, beware: many American mutual funds are rejecting orders to buy if the address on the account is not a U.S. address. And I’ve been approached by clients of other brokerage houses whose mutual fund trades have retroactively been cancelled because of the foreign address issue. Not every brokerage firm in America is comfortable dealing with accounts of Americans living overseas.

There are also challenges in buying mutual funds through an overseas brokerage account. If your foreign investment house sells you a foreign mutual fund, not only will it report your assets to America (or else it risks facing steep taxes), but you may need to report the foreign mutual fund as a PFIC (Passive Foreign Investment Company).

(3) The current situation has made it very hard to transfer assets, as countries don’t automatically recognize notaries from other countries. This means if you live overseas and inherit an American brokerage account, you may need to fly into America to physically have your signature witnessed by an American company that can offer a “medallion guarantee.”

(4) It’s very difficult to get life insurance from a U.S. insurance company because they won’t recognize an address outside the United States.

(5) Say goodbye to your U.S. credit and debit cards. Some of them don’t work away from the United States, while many companies will refuse to mail your statements overseas. And if you have an existing account, now that your address has moved abroad, you won’t receive a new card when it becomes necessary.

(6) Don’t think you can solve your problems by opening a bank account in the United States. Without a U.S. address, forget about it. And if you receive a dollar check, it’s not a simple matter of depositing it in your bank account abroad, as the banks charge a fortune for conversions into local currency, and it’s not unusual to take up to three weeks for foreign checks (yes, outside the U.S. dollar checks are considered ‘foreign’) to clear.

So what are the solutions to these thorny problems?

You’ll find them in my new e-book, The Expatriate’s Guide to Handling Money and Taxes, which I wrote in order to help the many bewildered expats that I meet in my capacity as a financial adviser. As a reader of The Jewish Press, use the coupon code JPRESS to get the book at half price.

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at doug@profile-financial.com

The author's opinion does not necessarily reflect the opinion of The Jewish Press.

If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

No Responses to “Why It’s Tough to Be an American”

Comments are closed.

Current Top Story
Jewish blood libel cartoon posted on Facebook sometime in 2014 by an UNRWA teacher in Jordan.
UNRWA Teacher in Jordan Promotes Hatred of Jews on Facebook
Latest Blogs Stories
Doug Goldstein

Why is the study of demographics essential to predict the economy?

Seems Obama "Loved" Sderot when he was running to be Pres.

Jews & Israel will have a smaller role and value in the 2016 Pres. election campaign than in decades

obamatargetiran

No one wants war; sometimes there’s no choice. Sometimes it’s the lesser of 2 evils. US must prepare

Palestinians attack an Israeli soldier during clashes between Israeli security forces and Palestinian protesters, Aug28, 2015, in the West Bank village of Nabi Saleh near Ramallah.

Despite many IDF soldiers jailed for defending themselves, families say,”Rather jailed than dead.”

Why won’t the gov’t finally annex YESHA & Jordan Valley formalizing their status in State of Israel?

Both “Half-Shabbat” & R’ Yosef’s opinion champion an extreme. There most certainly is a happy medium

Trump’s slogan and story gives American restores hope to dream to: “Make America Great Again”

Is GDP outdated an measure of prosperity? Are there any alternative methods of assessing $ growth?

In their attack on Ban Ki Moon, Hamas admitted to committing a different war crime.

The ideal of Modern Orthodoxy should be not be viewed as a compromise the way most Charedim view it.

Israel shouldn’t rely on US; It has an awful record in protecting allies.

The Halacha of shmirat einayim (guarding one’s eyes) is incumbent on the MAN; it’s his obligation

Dem. presidential candidate Doug Shreffler talks about his campaign & its motto “as good as it gets”

I’ve decided to move away from my safety net-and I wouldn’t change that decision for anything.

Was “Jerusalem” the song Matisyahu planned to perform? It was the PERFECT response to BDS campaign

More Articles from Doug Goldstein, CFP®
Doug Goldstein

Why is the study of demographics essential to predict the economy?

Doug Goldstein

Is GDP outdated an measure of prosperity? Are there any alternative methods of assessing $ growth?

Dem. presidential candidate Doug Shreffler talks about his campaign & its motto “as good as it gets”

How does the Iranian deal affect anti-terrorist legislation adopted by a number of US states?

Why are wealthy people less likely to gossip? So if you get rich you’ll cut down on Lashon Hora!

What has made Israeli innovative startups world leaders in high tech?

Author Gail Reynolds offers great advice for Mom’s wanting to build a business around their families

How can you remove anxiety and worry from retirement planning?

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/why-its-tough-to-be-an-american/2013/04/04/

Scan this QR code to visit this page online: